Figure Out Your Finances
Getting a graduate business degree is a major investment. Here are 5 ways to start preparing financially for B-School.
1. Get Your Finances in Order
- Save some money to pay for at least a part of the cost of your education
- Reduce your credit card debt
- Pay down your car loan
- Pay down debt
- Prepare a budget
2. Understand the Financial Aid Process
Before you can get a loan, the school has to approve your application for financial aid first. Then a lender can loan you money. To improve your chances of getting the loan, reduce personal debt as much as possible and stay up to date on credit card payments and outstanding loans. See how your peers are paying for their education.
A Word About Loans
Be aware that a school may not allow you to borrow the maximum a lender will approve. Schools use an estimated cost of education and living expenses to figure out what you should borrow, which may be less than the maximum you could borrow. Loans are paid back over time, with interest accruing. You don’t want to struggle to make the monthly repayments after you graduate, so only borrow what you need.
3. Review Your Business School Costs
Total costs of attending B-School include:
- Academic expenses
- Cost of living
- Opportunity costs (compare your projected earnings over the next several years with and without a graduate business degree)
Loans are a significant and important part of the financial aid package for most students. If it’s likely that you’ll need financial aid, start lining up your financial resources now.
4. Get Your Credit Report and Credit Score
Get your credit history and credit score from appropriate credit bureaus in your region.
Review each credit report carefully. If any information on the reports seems inconsistent or incorrect, you can file a dispute on the credit bureau’s website.
Close lines of credit (such as credit cards) that you no longer use - the less available credit you have, the more attractive you will look to a lender - but don't close all your acounts at once, open new lines of credit, or take out new loans, or your credit score could be lowered.
5. Start Reducing Expenses
Pare down expenses wherever you feel you can. You might be surprised at how small changes in your spending habits will help out in the long run.
Learn more about applying for financial aid, or get more tips on improving your credit score at www.myfico.com.